Correlation Between American Hotel and Vita Coco
Can any of the company-specific risk be diversified away by investing in both American Hotel and Vita Coco at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Hotel and Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Vita Coco, you can compare the effects of market volatilities on American Hotel and Vita Coco and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American Hotel with a short position of Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Vita Coco.
Diversification Opportunities for American Hotel and Vita Coco
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Vita is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco and American Hotel is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American Hotel Income are associated (or correlated) with Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of American Hotel i.e., American Hotel and Vita Coco go up and down completely randomly.
Pair Corralation between American Hotel and Vita Coco
Assuming the 90 days horizon American Hotel Income is expected to under-perform the Vita Coco. In addition to that, American Hotel is 2.01 times more volatile than Vita Coco. It trades about -0.05 of its total potential returns per unit of risk. Vita Coco is currently generating about 0.05 per unit of volatility. If you would invest 2,666 in Vita Coco on September 12, 2024 and sell it today you would earn a total of 1,054 from holding Vita Coco or generate 39.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.37% |
| Values | Daily Returns |
American Hotel Income vs. Vita Coco
Performance |
| Timeline |
| American Hotel Income |
| Vita Coco |
American Hotel and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Vita Coco
The main advantage of trading using opposite American Hotel and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Vita Coco can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Vita Coco will offset losses from the drop in Vita Coco's long position.| American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Ashford Hospitality Trust | American Hotel vs. Braemar Hotels Resorts | American Hotel vs. Braemar Hotels Resorts |
| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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